Mich. Admin. Code R. 299.9709 - Financial test and corporate guarantee for closure or postclosure
Rule 709.
(1) An
owner or operator may satisfy the requirements of this part by demonstrating
that he or she passes a financial test as specified in this rule. To pass this
test, the owner or operator shall meet the criteria of either subdivision (a)
or (b) of this subrule as follows:
(a) The
owner or operator shall have all of the following:
(i) Two of the following 3 ratios:
(A) A ratio of total liabilities to net worth
less than 2.0.
(B) A ratio of the
sum of net income plus depreciation, depletion, and amortization to total
liabilities of more than 0.1.
(C) A
ratio of current assets to current liabilities of more than 1.5.
(ii) Net working capital and
tangible net worth each not less than 6 times the sum of the current closure
and postclosure cost estimates and any other obligations covered by a financial
test.
(iii) Tangible net worth of
not less than $10,000,000.00.
(iv)
Assets in the United States amounting to not less than 90% of his or her total
assets or not less than 6 times the sum of the current closure and postclosure
cost estimates and any other obligations covered by a financial test.
(v) Total assets in Michigan of not less than
$50,000,000.00, excluding the value of any land used for hazardous waste
disposal or have total assets in Michigan which are not less than 6 times the
sum of the approved closure and postclosure cost estimates for facilities
subject to these rules, whichever is larger.
(b) The owner or operator shall have all of
the following:
(i) A current rating for its
senior unsecured debt of AAA, AA, A, or BBB, as issued by Standard and Poor's,
or Aaa, Aa, A, or Baa as issued by Moody's.
(ii) Tangible net worth not less than 6 times
the sum of the current closure and postclosure cost estimates and any other
obligations covered by a financial test.
(iii) Tangible net worth of not less than
$10,000,000.00.
(iv) Assets located
in the United States amounting to not less than 90% of his or her total assets
or not less than 6 times the sum of the current closure and postclosure cost
estimates and any other obligations covered by a financial test.
(v) Have total assets in Michigan of not less
than $50,000,000.00, excluding the value of any land used for hazardous waste
disposal, or have total assets in Michigan that are not less than six times the
sum of the approved closure and postclosure cost estimates for facilities
subject to these rules, whichever is larger.
(2) The phrase "current closure and
postclosure cost estimates," as used in subrule (1) of this rule, means the
cost estimates required under R 299.9702 and equivalent or substantially
equivalent federal or state regulations. The phrase "other obligations covered
by a financial test," as used in subrule (1) of this rule, means the financial
assurance for solid waste management facilities under part 115 of the act and
equivalent or substantially equivalent federal or state regulations, the
financial assurance for injection wells under 40 C.F.R. part 144, the financial
assurance for underground storage tanks under 40 C.F.R. part 280 and equivalent
or substantially equivalent state regulations, the financial assurance for
polychlorinated biphenol facilities regulated under 40 C.F.R. part 761 and
equivalent or substantially equivalent state regulations, the financial
assurance for remediation costs under part 201 of the act and equivalent
federal or state regulations, and the fiinancial assurance for corrective
action under R 299.9713 and equivalent or substantially equivalent federal or
state regulations.
(3) To
demonstrate that he or she meets this test, the owner or operator shall submit
all of the following items to the director:
(a) A letter signed by the owner or
operator's chief financial officer and worded as specified by the
director.
(b) A copy of the
independent certified public accountant's report on examination of the owner's
or operator's financial statements for the latest completed fiscal
year.
(c) A special report from the
owner's or operator's independent certified public accountant to the owner or
operator on comparison of the data presented in the chief financial officer's
letter to the independently audited, year-end financial statements. The special
report shall describe the agreed-upon procedures performed and related
findings, including if there were any discrepancies found.
(4) An owner or operator of a new facility
shall submit the items specified in subrule (3) of this rule to the director
not less than 60 days before the date on which hazardous waste is first
received for treatment, storage, or disposal.
(5) After the initial submission of the items
specified in subrule (3) of this rule, the owner or operator shall send updated
information to the director within 90 days after the close of each succeeding
fiscal year. This information shall consist of all items specified in subrule
(3) of this rule.
(6) If the owner
or operator no longer meets the requirements of subrule (1) of this rule, he or
she shall send notice to the director of the intent to establish alternate
financial assurance as specified in this part. The notice shall be sent, by
certified mail, within 90 days after the end of the fiscal year for which the
year-end financial data show that the owner or operator no longer meets the
requirements. The owner or operator shall provide the alternate financial
assurance within 120 days after the end of such fiscal year.
(7) The director may, based on a reasonable
belief that the owner or operator might no longer meet the requirements of
subrule (1) of this rule, require reports of financial condition at any time
from the owner or operator in addition to that information required of the
owner or operator in subrule (3) of this rule. If the director finds, on the
basis of such reports or other information, that the owner or operator no
longer meets the requirements of subrule (1) of this rule, the owner or
operator shall provide alternate financial assurance as specified in this part
within 30 days after notification of such a finding.
(8) The director may disallow use of a
financial test to meet the requirements of this part on the basis of
qualifications in the opinion expressed by the independent certified public
accountant in his or her report on examination of the owner's or operator's
financial statements.An adverse opinion or a disclaimer of opinion will be
cause for disallowance. The director shall evaluate other qualifications on an
individual basis. The owner or operator shall provide alternate financial
assurance as specified in this rule within 30 days after notification of the
disallowance.
(9) The owner or
operator is no longer required to submit the items specified in subrule (3) of
this rule when one of the following occurs:
(a) An owner or operator substitutes
alternate financial assurance as specified in this rule.
(b) The director releases the owner or
operator from the requirements of this part in accordance with R
299.9703(5).
(10) An
owner or operator may meet the requirements of this rule by obtaining a written
guarantee, hereafter referred to as "corporate guarantee." The guarantor shall
be the parent corporation of the owner or operator. The guarantor shall meet
the requirements for owners or operators in subrules (1) to (8) of this rule
and shall comply with the terms of the corporate guarantee. The wording of the
corporate guarantee shall be identical to wording provided by the director. The
corporate guarantee shall accompany the items sent to the director as specified
in subrule (3) of this rule. The terms of the corporate guarantee shall provide
for all of the following:
(a) That if the
owner or operator fails to perform final closure or postclosure care of a
facility covered by the corporate guarantee in accordance with the closure and
postclosure plans and other operating license requirements when required to do
so, the guarantor shall do so or establish a trust fund as specified in R
299.9704 in the name of the owner or operator.
(b) The corporate guarantee shall remain in
force unless the guarantor sends notice of cancellation, by certified mail, to
the owner or operator and to the director. Cancellation shall not occur,
however, during the 120 days beginning on the date of receipt of the notice of
cancellation by both the owner or operator and the director, as evidenced by
the return receipts.
(c) If the
owner or operator fails to provide alternate financial assurance as specified
in this part and obtain the written approval of such alternate assurance from
the director within 90 days after receipt by the owner or operator and the
director of a notice of cancellation of the corporate guarantee from the
guarantor, the guarantor shall provide such alternative financial assurance in
the name of the owner or operator.
(d) In the case of corporations that are
incorporated outside of Michigan, the guarantor shall identify and maintain a
registered agent for service of process in Michigan.
Notes
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